FT.com Comment & analysis Comment - Drug research needs serendipity

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BreadcrumbFinancialCOMMENT & ANALYSIS FT Home > Comment & analysis > CommentDrug research needs serendipityBy David Shaywitz and Nassim Taleb JobsPublished: July 29 2008 19:42 | Last updated: July 29 2008 19:42The molecular revolution was supposed to enable drug discovery to evolve from chanceobservation into rational design, yet dwindling pipelines threaten the survival of thepharmaceutical industry. What went wrong?The answer, we suggest, is the mismeasure of uncertainty, as academic researchersunderestimated the fragility of their scientific knowledge while pharmaceuticals executivesoverestimated their ability to domesticate scientific research.For all the breathless headlines proclaiming breakthrough discoveries, the truth is that we stilldo not understand what causes most disease. Even when we can identify a responsible geneor implicate an important mutation, we have made only limited progress in turning these resultsinto treatments.Medical research is particularly hampered by the scarcity of good animal models for mosthuman disease, as well as by the tendency of academic science to focus on the “bits andpieces” of life – DNA, proteins, cultured cells – rather than on the integrative analysis of entireorganisms, which can be more difficult to study.Nevertheless, real scientific progress has occurred, inviting the question: why dopharmaceutical companies, which spend billions of dollars each year trying to turn advancesinto treatments, have so ...

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Drug research needs serendipity

By David Shaywitz and Nassim Taleb

Published: July 29 2008 19:42 | Last updated: July 29 2008 19:42

The molecular revolution was supposed to enable drug discovery to evolve from chance

observation into rational design, yet dwindling pipelines threaten the survival of the

pharmaceutical industry. What went wrong?

The answer, we suggest, is the mismeasure of uncertainty, as academic researchers

underestimated the fragility of their scientific knowledge while pharmaceuticals executives

overestimated their ability to domesticate scientific research.

For all the breathless headlines proclaiming breakthrough discoveries, the truth is that we still

do not understand what causes most disease. Even when we can identify a responsible gene

or implicate an important mutation, we have made only limited progress in turning these results

into treatments.

Medical research is particularly hampered by the scarcity of good animal models for most

human disease, as well as by the tendency of academic science to focus on the “bits and

pieces” of life – DNA, proteins, cultured cells – rather than on the integrative analysis of entire

organisms, which can be more difficult to study.

Nevertheless, real scientific progress has occurred, inviting the question: why do

pharmaceutical companies, which spend billions of dollars each year trying to turn advances

into treatments, have so little to show for their efforts? Answer: spreadsheets are easy;

science is hard.

Like most corporations, pharma companies seek to identify the largest markets they can find

and develop products for these customers – an approach quite sensible in theory, but less so

in practice. First, drug sales are notoriously difficult to foresee even at the time the medicine

hits the market, so predicting sales a decade or more ahead of registration, when the research

and development process typically begins, is generally a fool’s errand, yielding more false

precision than true insight. Yet much of contemporary pharma R&D is driven by this sort of

rigid planning.

Second, the process of drug development is also very difficult to predict, because of both our

limited understanding of disease and our inevitably imperfect understanding of the effect any

new compound will have on the body. While design played a pivotal role in the development of

effective HIV drugs, other modern medications were discovered in the old-fashioned way: by

accident. Viagra, for example, was originally developed as a treatment for chest pain.

In the face of

declining productivity

, pharma companies have been trying to boost output by

increasing efficiency, narrowing their focus to a handful of disease areas, shelving safe but

ineffective compounds without fully exploring their scientific potential and trying to ensure that

each project the company is working on is carried out with a clearly defined market segment in

mind. Unfortunately, for new medicines in particular, this strategy often fails significantly to

reduce exposure to negative uncertainty – all the bad things that can happen during drug

development – and eliminates much of the exposure to positive uncertainty (serendipity) that

remains so vital.

So intent are managers on maintaining focus that important opportunities for novel discovery

are lost, as is the intellectual space for tinkering and capitalising on the chance observations

and unexpected directions so important in medical research. Instead, pharma executives are

creating an ever-more-rigid environment and then wondering why their productivity is going

down, and why they have such difficulty attracting and retaining talent.

Fortunately for patients, hope may lie just round the corner. As pharma companies cut costs

by outsourcing large parts of their operations, service providers have sprung up around the

world to fulfil these functions. This is good news: while the pharmaceutical industry is ripe for

disruptive innovation, the barriers to entry have been far too high for anyone new to break

through. If the trend to outsourcing continues and if the main competence of pharma

companies becomes (as some have suggested) simply their ability to orchestrate the entire

process, it is not difficult to imagine that an innovator – particularly an innovator with a greater

appreciation of the nuances of science – might be able to do this a lot better.

The next-generation pharma company will create a lean, agile organisation able to capture,

consider and rapidly develop the best scientific ideas in a wide range of disease areas and

aggressively guide these towards the clinic. Small market size will not deter their pursuit of

promising drugs with a clear and comparatively inexpensive path to clinical development; their

ideal portfolio will consist of an extensive collection of such molecules, cheap options that may

offer unexpected benefit to patients and provide disproportionately large returns to investors.

If pharma companies want to stay in the game, their leaders will need to resist the false

comfort of revenue predictions and valuation spreadsheets, and instead resolve to look

uncertainty in the face, acknowledge its presence and embrace the opportunity it represents.

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David Shaywitz, a physician-scientist, is a management consultant in New Jersey; Nassim

Nicholas Taleb is author of ‘The Black Swan: The Impact of the Highly Improbable’ (Penguin,

2007)

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The Financial Times Limited 2008

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